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07-18-2011 - Preliminary Budget Workshop CITY COUNCIL OF EDGEWATER PRELIMINARY BUDGET WORKSHOP JULY 18, 2011 5:00 P.M. COUNCIL CHAMBERS MINUTES CALL TO ORDER Mayor Thomas called the Workshop to order at 5:00 p.m. in the Council Chambers. ROLL CALL Mayor Michael Thomas Present Councilman Justin Kennedy Present Councilwoman Gigi Bennington Present Councilman Michael Ignasiak Present Councilman Ted Cooper Arrived at 5:10 p.m. City Manager Tracey Barlow Present City Clerk Bonnie Wenzel Present City Attorney Aaron Wolfe Present MEETING PURPOSE City Manager Barlow informed Council the purpose of the pre - preliminary budget workshop was because at the regular meeting they would be asked to set the maximum millage rate, which would be advertised. They could reduce the millage rate but couldn't go up after the maximum millage rate is set. City Manager Barlow turned the meeting over to Finance Director McKinney who presented a snapshot of where they are. At the August 15 Budget Workshop they would talk about department specific and line codes, etc. Mr. McKinney informed Council when the budget was presented last Wednesday evening, it was a balanced, all funds with the General Fund at 6.47 mills. He further went through a Powerpoint Presentation (Attached). Some of the slides were provided to him by Volusia County Property Appraiser Morgan Gilreath. Mayor Thomas recognized Councilman Cooper as now being present at the meeting. Councilman Cooper questioned if they had the County's estimate yet on dispatch. City Manager Barlow informed him there would be no additional costs. 1 Council Preliminary Budget Workshop July 18, 2011 Councilman Cooper asked if the decrease in ad valorem was reflecting what the Governor had passed for extending homestead to businesses. Mr. McKinney informed him they base their ad valorem proceeds on property values as presented to them by the Property Appraiser. City Manager Barlow informed him Mr. Gilreath had factored in every law that would be implemented. Mr. McKinney continued his Powerpoint Presentation by describing the Budget Challenges with regard to Revenues and Expenses. He expressed concern with Animal Services. He further identified capital that was purchased in the Refuse Department and that Stormwater was now debt free. There was a brief discussion regarding big expenditures coming up in Stormwater next year with regard to a mandated public education component related to the Eastern Shores project that had been completed, the Hart Avenue design and grant application and the 29 Street pipe crossing. Mr. McKinney continued his Powerpoint Presentation by describing the Major Capital Outlay to be purchased next year. There was then a brief discussion regarding Street Resurfacing. City Manager Barlow spoke of identifying some of the bigger roads such as Hibiscus Drive that need to be resurfaced and setting money aside for that due to the cost. Councilman Cooper questioned if it would be appropriate to move some money around due to the excess in the General Fund and look at some of those. City Manager Barlow informed him they didn't have enough excess that he was comfortable with. Councilman Cooper spoke of generating jobs for a large project like that which may be money well spent. City Manager Barlow spoke of being conservative going forward and there being a need for that money to help smooth into the other years to help keep the millage down so they can attract industry or business here which creates jobs long term. They have to keep the millage down to be competitive with neighboring cities. Mr. McKinney continued his Powerpoint Presentation by commenting on the Fund Reserves. There was a brief discussion regarding the Charter Reserve, which was at 16.7%. City Manager Barlow identified they would like to be closer to 20%. Councilwoman Bennington commented on putting $100,000 each year into a City Hall Fund. She questioned the $200,000. Mr. McKinney confirmed that was what was in the fund now and at the end of fiscal year 2011 it would be $300,000. 2 Council Preliminary Budget Workshop July 18, 2011 Mr. McKinney pointed out they were going to talk about the maximum millage calculations at the Regular Meeting and he would be asking Council to advertise at 6.85 %. They are balanced at 6.47%. The difference would be just over $200,000. They don't want to hamper themselves at 6.47% in case something comes up. Councilman cooper stated they were presently operating at 6.591% and questioned if they stayed at 6.85 %, why couldn't they split the difference and stay at the 6.591% and recommend that which was still over the 6.47% and would be within their range? City Manager Barlow identified they wouldn't do the final millage until September. Tonight they would set a maximum millage rate. They would have budget work sessions in August, at which time they would come up with a true millage rate. He recommended they advertise at 6.85 %. Roll back this year was 7.85% which he wasn't recommending. City Manager Barlow recognized it was the work force that made this happen by looking for cost saving initiatives in an effort to save money this year to allow it to be carried into this year's budget. He spoke of the efforts of the employees to pick up the extra workload when a position is frozen. He also identified he felt confident going forward with the presented budget at 6.47 mills. Councilman Ignasiak complimented Mr. McKinney for a good presentation. Councilman Kennedy stated good job so far and felt they needed to keep doing what they were doing. Councilwoman Bennington felt it was fantastic and she couldn't believe it was lowered even more. Councilman Cooper presented kudos to Mr. McKinney and staff. He cautioned next year wouldn't be fun. ADJOURNMENT There being no further business to discuss, Mayor Thomas adjourned the workshop. The workshop adjourned at 5:44 p.m. Minutes submitted by: Lisa Bloomer, CMC 3 Council Preliminary Budget Workshop July 18, 2011 Edgewater General Fund Budget Workshop July 18, 2011 A 1M.01k. 45.0!4. 90.0A 95.0% 80.0% 7'5.0% 70.0€• 65.0% 60AWt 55.0°6 1A0% 45.0% Q.0% 35.09 30.0% 25.094. 20.0% 15.0" i LO.�N T. Doi volusia's History of Real Estate Development Percentage of Development by Property Category: Residential, Commercial, Industrial, Institutional & Governmental 1850 - 2011, Volusia County, FL I &SO -l0§ 1901 '949 hSir.t?55 196G1%3- 1970197? 1!S[1 M9 1-190 19r49 20002Wj 201020111part) IN 0 Year Built Range Florida Housing is Generally Improving Statewide Existing Home Sales & St arts Median rice 4) C C 4) CL -No. of Sales.l. Sales volume and building permits are both back in positive territory, showing year- over-year gro,.,-,,-th. 400,000 350,000 300,000 FE 250,000 CL 200,000 C M 150,000 100,000 50,000 9 Median Sale Prices Single Family Residence by Taxing Authority (with Sale Count) ICI 4CI e cam - -.A 0 Ca 6 e qo pc, sp fiy 06 2011 Tax Roll "Net " Value Change Excludes New Construction, Annex, etc. East Volusia Cities ±pities Just Taxable Daytona Beach -8.20% -8.48% Daytona Bch Shores -10.11% - 10.23% Edgewater - 16.15% - 16.07% Flagler Beach - 20.92% -20.41% Holly Hill - 11.15% - 11.70% New Smyrna Bch -4.51% -4.80% Oak Hill - 9.03 % - 10.02% Ormond Beach -7.13% -6.55% Ponce Inlet -8.27% -6.43% Port Orange - 3.66 0/6 -3.41% South Daytona -9.17% -7.80% 1 D JU11 6 West Volusia ±pities Just Debary -7.80% -7.18% Deland -8.56% -9.74% Deltona - 19.95% - 23.16% Lake Helen - 15.65% - 13.38% Orange City -9.73% - 10.36% Pierson - 16.29% -9.98% Unincor orated Count J us# TaX, County -8.98% - 8.59% City of Edgewater SFR Median Sale Price per SgFt 2001: 2002 2003 2004 2001 Real Estate Prices 2005 2006 2007 2008 2009 2010 Sale Year $160.00 $140.00 $120.00 d $100.00 v •L $80.00 to $60.00 $40.00 $20.00 City of Edgewater SFR Median Sale Price per SgFt 2001: 2002 2003 2004 2001 Real Estate Prices 2005 2006 2007 2008 2009 2010 Sale Year 2011 Challenge for the City of Edgewater (and other taxing authorities) of an , , 2010 Ad Valorem Budget M $4,540,138 (Last year's Property Taxes at 6.591) • • Millage Rate M .0078528 (7.8528 mills) 19.0% potential increase in order to fund last year's Ad Valorem Budget Revenue Outlook Historical Prope Values & Ad Valorem Tax Yr Value Mills FY05 $ 664,137,932 - 6.45 FY06 $ 812,943,450 - 6.45 FY07 $1,089,419,939 - 5.70 FY08 $1,J95.9974.v542 - 5.20 FY09 $ 981,617,652 - 5.90 FY10 $ 822,343,254 - 6.36 Tax $4,125,604 $5,045,677 $5,983,622 $6,053,935 $5,606,749 $4,968,598 FY11 $ 688, 838, 957 - 6.591 $4,313,131 FY12 $ 582, 726, 592 - 6.47 $3,581,729 GF Budget $13,0194,p640 $14,136,921 $14,107,382 $13,934,557 $14,356,423 $12,544,666 $12,454,1 09 $11,956X23 16,000,000 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 City of Edgewater Tax Analysis 2012 - 6.47 2011- 6.59 2010 - 6.36 2009 - 5.90 2008 - 5.20 2007 - 5.70 2006 - 6.45 2005 - 6.45 2004 - 6.95 2003 - 6.95 w Tax Levy © General Fund City of Edgewater 2012 Taxable Value 14,000,000 12,000,000 10,000,000 r 8,000,000 ? {fi Taxable Amount 1 � { 6,000,000 b r 4,000,000 2,000,000 2012 - 6.47 2011 - 6.59 2010 - 6.36 2009 - 5.90 2008 - 5.20 2007 - 5.70 2006 - 6.45 2005 - 6.45 2004 - 6.95 2003 - 6.95 City of Edgewater Tax Levy 7,000,000 6,000,000 kid im 5,000,000 IN 4,000,000 m m m m m __.: v Tax Levy 3,000,000 2,000,000 1,000,000 2012-6.47 2011-6.59 2010-6.36 2009-5.90 2008-5.20 2007-5.70 2006-6.45 2005-6.45 2004-6.95 2003-6.95 16,000,000 14,000,000 12,000,000 10,000,000 8,000,000 Mom 4,000,000 2,000,000 General Fund 2012 - 6.47 2011- 6.59 2010 - 6.36 2009 - 5.90 2008 - 5.20 2007 - 5.70 2006 - 6.45 2005 - 6.45 2004 - 6.95 2003 - 6.95 I Fund r 3,950,000 3,900,000 3,850,000 3,800,000 3,750,000 3,700,000 3,650,000 6.85 City of Edgewater Tax Levy at Various Millage Rates 6.591 w Tax Levy 100.0% 9S-O% 90.0% 85.0% wk% 75.0% 70.0% 65.0%, 60.0% Volusia's History of Real Estate Development Percentage of Development by Property Category: Residential, Commercial, Industrial, Institutional & Governmental 1850 - 2011, Volusia County, FL 3 Me- 1969 1-990 1999 2OW-ZO09 2010-2012(pa►t) 0 E3 ■ Year Built Range City of Edgewater Taxes Per Capita 350 300 250 150 100 50 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 Taxes per Capital Revenue Outlook Revenue Outlook 2011 and Beyond • Property Tax Outlook - FY 2012 - FY 2013 -(15.4%) -(10%) - FY 2014 - 0% 16 Budget Strategies Used For FY2012 • Maintained a hiring freeze • Eliminated vacated positions • Maintained a hiring freeze • Year 2 Step Plan for employees • Reduced Operating Budgets • Reassessed and Adjusted CIP Projects • Adjusted Reserves Budget Challenges General Fund • 2005 - $9,857,233 • 2006 - $89883,985 • 2007 - $7,618,910 • 2008 - $6,070,152 • 2009 - $4,6493000 • 2010 - $3,141,380 • 2011 - $23563,625 Debt Reduction Enterprise Funds Reduction • $37,001,425 • $30255837 - $393489836 • $3157205482 • $4,170,430 • $289841,268 - $4,4279972 • $2599585775 - $433033645 • $23,796,360 • $3,670,035 • $21,837,783 - $295363332 Total Reduction $22,457,250 Budget Strategies FY2012 •Compensation —Step Plan plus 2% •Health insurance and other benefits • No Projected Increase • State Revenue FY12 decrease $114.,973 • County EMS FY12 decrease $ • Ad Valorem FY11 decrease $731,,402 at $6.47 • Dispatch Consolidation savings of $ Budget Challenges Current Year Budget at 75% of Year Revenues General Fund 65% Animal Services 61% Water I Sewer 72% Refuse 57% Stormwater 67% Expenses 69% 63% 79% 68% 60% Still maintaining all budgeted capital outlay • Current Year Cash Balance General Fund Animal Services Water / Sewer Refuse Sto rmwate r $2,891,390 $ (16,540) $2,138,265 $ 938,326 $ 317,898 Budget Challenges Capital -Police Pursuit Vehicle - $ 27,301 -IT Upgrades - 122,664 -Bush hog 21858 •W /S Infrastructure 629500 •Kenworth Loader 1479808 •Kenworth Semi 138,697 -Boom mower 1209123 .,Road resurfacing 150,000 Total Capital FY2012 $7719951 Street Resurfacing •Cherrywood Lane $ 299325 -Edgewater Dr 269520 -Lone Pine Dr 13,260 •Pinesedge Ct 117220 •Wildwood Dr 48,535 •Parkwood Lane 16,235 -Contingency 41905 Total FY2012 $1507000 Fund Reserves As Stated by 9/30/10 CAM •$51974,500 General Fund Reserves -Charter 16.73% $2,000,000 General Fund Unreserved / Designated •FY12 Budget $1,331,804 (used $750,000) • Available $581,804 (unaudited) -Designated F.I.N.D. •$1,322,798 (used $557,240) -Designated City Hall •$200,000